EDITORIAL: Another lifeline for Alabama's Medicaid Agency

HUNTSVILLE, Ala. _ Amid all the gloom over cash-starved state agencies came some good news this week.

Alabama's Medicaid Agency will receive a $55 million performance bonus for its effectiveness in enrolling low-income children in the state's Medicaid health insurance program for 2010.

It was the second bit of good financial news for Alabama's Medicaid Agency in as many months.

Last month, Gov. Bob Riley helped finalize an agreement in a $500 million accounting dispute with the federal Medicaid agency. By agreeing to change its calculation methods on billing for reimbursements, Alabama avoided repaying the federal Centers for Medicare and Medicaid Services $500 million for improper billing techniques.

A $500 million reimbursement order would have dealt a deadly blow to the Alabama Medicaid budget, which this fiscal year included $345 million in state funds for the overall $4.2 billion state program.

The $55 million performance bonus is the highest among the 15 states qualifying for it this year. The award recognizes states which had implemented at least five of eight program features designed to promote enrollment and retention in children's health insurance coverage above targets set by federal law.

Methods used in Alabama include providing 12 months of continuous enrollment, removing the requirement for an in-person interview to qualify for coverage, streamlining the eligibility renewal process, removal of asset limits for pregnant women and children, and use of a joint application between Medicaid and ALL Kids.

Alabama's program, known as ALL Kids, provides health insurance for lower and middle income children who don't qualify for Medicaid but whose families don't have insurance. This is the second consecutive year Alabama has received this bonus money.

The state's aggressiveness means 95 percent of its children under age six are now covered by some type of medical insurance and that 93 percent of all children are covered. That's impressive but still some 100,000 children are among the 4.8 million Alabamians without coverage. The figure could grow with new clients thrust into poverty and unemployment by the economy.

State Health Officer Don Williamson said some of the uncovered children are probably in families whose household income exceeds limits set by ALL Kids but who don't have private insurance. Most, however, are likely Medicaid eligible but are just difficult to find.

The bonus money will go into the state's struggling General Fund budget, which provides money for Medicaid and other non-education state agencies.

"Receiving this bonus obviously means a lot for our state budget-wise," Riley said. "More importantly, it means ensuring a struggling family out there never has to choose between putting food on the table and filling a child's prescription,"

While we share Riley's elation for the progress, citizens should recognize the dire outlook for Medicaid in the coming year. Cuts are likely as a deficit-weary Congress tries to curb spending. Without more help from Washington, many states will be forced to divert money from other programs to shore up Medicaid, which has ballooned to record enrollment during the economic downturn.